Jerome Kerviel has just been convicted and sentenced in Paris. Mr Kerviel was the trader at the centre of the Societe Generale wobble in January 2008. This was the event that provided the first hints that things going wrong in the US might hit Europe. Of course, it was completely unrelated, but we didn’t know that at the time that it was not a tremor in a coming stock market crash, but just an isolated incident.
He has been fined as part of his sentence. The fine is a whopping 4.9 billion euros!! Is he meant to be bailing out Ireland, or paying a fine?
Don’t get me wrong, I think the risk and reward balance is very wrong for investment bankers and hedge fund managers. When they screw up - as we all do - they need to face more serious implications than they have been doing so far. And when they are caught deliberately doing wrong, they need to face punishment. But 4.9 billion euros? When will he pay that? With what? Its a little unrealistic isn’t it?
But luckily, he is only 33, so he still has the time to work it off…